TSP Talk Blog

Stocks were up again on Tuesday so the early Thanksgiving week lull did not materialize. Does that mean the normally strong two days surrounding Thanksgiving won't be as good as "normal?" The Dow gained a modest 55-points and we saw a quarter percent gains in most of the indices on another quiet day - although decent volume, of trading. Typically a little sideways action would seem likely after the recent pop up, but it is not a typical couple of days coming up.

Daily TSP Funds Return More returns

The battle going on right now is a series of great looking index charts, versus troubling internal weakness.

We have the potential trade deal continuing to be dangled in front of us like a carrot.

We have an impeachment in process, but the unknown is whether it will go forward from here or, if it will pass in the House of Representatives if it does get voted on. If it is passed, then we go through a show in the Senate.

We also still have the yield curve inversion in the air, which has a great record of predicting recessions in the coming year or two.

That's a lot to throw at us folks who are just trying to figure out what to do with our money to end this year, and start the New Year.

Next year is also a Presidential Election year. The average returns of a president's 4th year are positive but actually, because of the 37% loss in 2008, the average return of Presidential Election years is slightly below the average of all years.



But that's getting ahead of ourselves. We have a couple of strong seasonal days coming up today and Friday, then next week it's more typical action that gets worse in mid-December, until the final week of the month which has a great record.

So there's a lot to think about and consider going forward, and depending on your investment time horizon, or your trading style, we could all have a different approach in the next 4 or 5 weeks.

The stock market is open on Friday but it is just a half day on trading, although that won't impact the TSP deadlines.

From www.tsp.gov: HOLIDAY CLOSING: Some financial markets will be closed on Thursday, November 28 in observance of the Thanksgiving Day holiday. The Thrift Savings Plan will also be closed. Transactions that would have been processed Thursday night (November 28) will be processed Friday night (November 29), at Friday's closing share prices.

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The S&P 500 (C-fund) made another new high yesterday and that precarious looking narrow trading channel keeps moving along. It does appear frothy and there tends to be a mid-December pullback before the Santa Claus rally, but this has been a special year for stocks being up over 25%, and money managers may find themselves needing to buy any dip to pack their end of year reports with winning stocks.




The S-fund look good. Small caps followed through on Monday's big rally with another modest gain to lead the TSP funds.




The EFA (I-fund) lagged on the day as the short-term consolidation seems to be continuing. The rising trading channel broke a while ago, but rather than rollover, it has been consolidating sideways for the last three weeks, and possibly on the verge of following the U.S. indices to another new high.




The AGG (bonds F-fund) continues its move higher off the November low and the easy breakout from that bull flag last week. It may be looking to test that double top again, and triple tops don't tend to be as tough to break through so it will be interesting to see how high bonds can go. And while we're at it, why are yields falling so much? Does the bond market think the recession is still coming?




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Thanks for reading. Have a Happy Thanksgiving! We'll see you with, most likely, a brief commentary on Friday.

Tom Crowley


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